(Alliance News) - Motorpoint Group PLC on Friday warned that sharp falls in used car prices, and disruption from a store closure, would mean full-year profit would be below expectations.
The Derby, England-based automotive retailer said macroeconomic conditions remained difficult in the third quarter to December 31, and were further compounded by the sharp falls in used car values and reduced selling prices.
The company said actions to proactively de-risk the impact of volatile higher priced vehicles led to a reduction in average selling price to GBP14,500 from GBP19,750 at the start of the financial year.
This was exacerbated by the timing of the seasonal increase in stock, and the disruption caused by the temporary Derby store closure, meaning full-year profit is now likely to be GBP5 million to GBP6 million below expectations, even with an anticipated strong fourth quarter.
Motorpoint said that, encouragingly, retail volumes improved through the quarter and this momentum has continued into the fourth quarter.
Costs, the company added, remain closely controlled, with further savings achieved in people costs and efficiencies resulting from technology investment.
It believes these corrective cost and efficiency actions together with an improving economic environment will ensure an improved financial performance in the financial year to March 2025.
The firm also announced a share buyback of up to GBP5 million which it considers an "attractive" use of resources.
Motorpoint shares closed up 0.7% at 98.70 pence in London on Friday.
By Jeremy Cutler, Alliance News reporter
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Motorpoint (MOTR)